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CIRCULAR No

CIRCULAR No.02/1999/TT-BKH OF SEPTEMBER 24, 1999 GUIDING THE ORDER AND PROCEDURES FOR GRANTING INVESTMENT PRIVILEGES UNDER THE GOVERNMENT�S DECREE No. 51/1999/ND-CP OF JULY 8, 1999 DETAILING THE IMPLEMENTATION OF DOMESTIC INVESTMENT PROMOTION LAW (AMENDED) No. 03/1998/QH10

In furtherance of Clause 3, Article 36 of the Government�s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of Domestic Investment Promotion Law (amended) No.03/1998/QH10 (hereafter referred to as Decree No.51/1999/ND-CP for short), the Ministry of Planning and Investment hereby guides the order and procedures for granting investment privileges (hereafter abbreviated as IP) as follows:

I. BODIES RECEIVING IP REGISTRATION DOSSIERS

In order to be granted IP, investors governed by the Domestic Investment Promotion Law (amended) and defined in Clauses 1, 2, 3, 4, 5, 6, 7, 8 and 9, Article 2 of Decree No. 51/1999/ND-CP shall send their IP registration dossiers to the dossier-receiving agencies according to the following stipulations:

1. The Ministry of Planning and Investment shall receive IP registration dossiers from enterprises established by decisions of the Prime Minister, ministers and heads of the central-level competent agencies.

2. The Planning and Investment Departments of the provinces and centrally-run cities (hereafter referred to as the provincial/municipal Planning and Investment Departments) where the investors execute their investment projects shall receive IP registration dossiers from:

- Enterprises established by decisions of the presidents of the People�s Committees of the provinces and centrally-run cities (hereafter referred collectively to as presidents of the provincial People�s Committees);

- Private enterprises and companies (including joint-stock companies with equitization plans ratified by the presidents of the provincial People�s Committees, who also decide the transformation of State enterprises into joint-stock companies);

- Unions of cooperatives; cooperatives engaged in the business lines stipulated in Clause 1, Article 13 of the Government�s Decree No. 16/CP of February 21, 1997 on the transformation, registration of cooperatives and organization of operation of unions of cooperatives (hereafter called Decree No. 16/CP for short);

- Enterprises, cooperatives and unions of cooperatives owned by overseas Vietnamese and/or foreigners permanently residing and making direct investment in Vietnam, or established jointly by Vietnamese citizens and overseas Vietnamese or foreigners permanently residing in Vietnam under the Law on Domestic Investment Promotion (amended);

- Educational, medical or cultural establishments having operation registration certificates.

3. The People�s Committees of the districts and provincial capitals (hereafter referred to as the district People�s Committees for short) where investors execute their investment projects shall receive IP registration dossiers from: Cooperatives not engaged in the business lines stipulated in Clause 1, Article 13 of Decree No. 16/CP; individuals and business groups operating under Decree No. 66/HDBT of March 2, 1992 of the Council of Ministers (now the Government).

For projects to be executed in many localities, investors may register investment privileges in one of such localities.

II. IP REGISTRATION DOSSIER

An investor shall send to the dossier-receiving agency an IP registration dossier, which includes three following elements:

1. The application for IP registration:

For the investor having project with IP registered for the first time, the application shall be made according to the set form; if he/she registers additional privileges for the project which has been granted IP according to the provisions of Articles 34 and 46, Decree No.51/1999/ND-CP, the form set therefor shall apply.

For projects registered for additional privileges, a report on the results of implementation of the investment project, the privilege level and term already enjoyed is also required.

For on-going projects which are now registered for IP, a report on the results of implementation of the investment project is also required.

Where an investor requests the import tax exemption for equipment, machinery and specialized transport means according to the provisions of Article 26, Decree No. 51/1999/ND-CP, he/she shall have to declare them in the IP registration application or make a list thereof in attachment to the application and take self-responsibility for the accuracy and truthfulness of such list.

2. The investment project or the investment/business plan (hereafter referred collectively to as the investment project):

For a project which must be ratified by the agency competent to decide the investment as prescribed by the Regulation on Investment and Construction Management (issued together with the Government�s Decree No. 52/1999/ND-CP of July 8, 1999), a valid copy of the investment decision is required.

The investment project must state clearly: The investor, the branch or trade to be invested in; the implementation location; the technical plan, technologies and demand for equipment, machinery and transport means; the capital mobilization plan; and the number of laborers to be employed.

3. The business registration certificate (a valid copy):

For the newly set up State enterprises, which have not yet filled in the business registration procedures, a valid copy of the enterprise establishment decision shall be used instead.

For individuals and business groups operating under Decree No. 66/HDBT of March 2, 1992 of the Council of Ministers (now the Government), it shall be the business license or the substitute thereof as prescribed by the Government for these subjects.

For private, people-founded and semi-public education and training establishments; private and people-founded medical establishments; and traditional cultural establishments, it shall be the operation registration certificate.

For investors who register the establishment of production and/or business establishments together with the investment privileges, the business registration dossier shall be used instead according to current provisions of law.

Investors being overseas Vietnamese and foreigners permanently residing in Vietnam shall, after producing papers evidencing their origins as stipulated at Points e and f, Clause 1, Article 43 of Decree No.51/1999/ND-CP, proceed with the same procedures like the investors being Vietnamese citizens.

III. ORDER FOR CONSIDERING THE GRANTING OF IP

1. For the already set up production/business establishments:

a/ The Ministry of Planning and Investment shall consider the IP registration dossiers of enterprises mentioned at Point 1, Section I of this Circular, and collect written comments from the concerned agencies, if deeming it necessary, so as to decide whether or not to grant IP certificates or additional IP certificates.

b/ The provincial Planning and Investment Departments shall consider the IP registration dossiers of the already set up production/business establishments defined at Point 2, Section I of this Circular, collect written comments from the concerned services, departments and branches, if deeming it necessary, then submit them to the presidents of the provincial People�s Committees for decision whether or not to grant IP certificates or additional IP certificates.

c/ The presidents of the district People�s Committees shall consider the IP registration dossiers of the already set up production/business establishments defined at Point 3, Section I of this Circular, collect written comments from the provincial Planning and Investment Departments as well as the concerned services, departments and branches in the provinces, if deeming it necessary, then submit them to the presidents of the provincial People�s Committees for decision whether or not to grant IP certificates or additional IP certificates.

2. For production and/or business establishments which make the IP registration together with the business registration:

a/ For IP registration dossiers of investment projects associated with the establishment of production/business establishments, which, as prescribed by law, must make business registration at the provincial/municipal Planning and Investment Departments, the provincial/municipal Planning and Investment Departments shall comply with the current regulations on the order and procedures for establishment and business registration, collect written comments from the concerned services, departments and branches in the provinces, if deeming it necessary, before submitting them to the presidents of the provincial People�s Committees for decision whether or not to grant IP certificates. The granting of IP certificates, if approved, shall be effected simultaneously with the granting of business registration certificates.

b/ For IP registration dossiers attached with business registration dossiers of cooperatives not engaged in the business lines stipulated in Clause 1, Article 13 of Decree No. 16/CP, or of individuals and business groups operating under Decree No. 66/HDBT of March 2, 1992 of the Council of Ministers (now the Government), the district People�s Committees shall consider the granting of business registration certificates or business licenses according to the current procedures. At the same time, they shall also examine conditions for privileges, collect written comments from the provincial Planning and Investment Departments as well as the concerned services, departments and branches in the provinces, if deeming it necessary, then submit them to the presidents of the provincial People�s Committees for decision whether or not to grant IP certificates to the concerned investors.

3. For IP adjustment or supplement:

If, in the course of execution of a project which has been granted IP, the investor registers additional privileges for the project since it satisfies other conditions therefor according to the provisions of Article 34, Decree No.51/1999/ND-CP, the agency that has received and processed the IP registration dossier of the project shall consider and submit it to the competent person for decision on the IP adjustment or supplement.

Where the investor fails to meet all conditions for further enjoyment of the privileges, he/she shall notify in writing this to the IP registration dossier-receiving body so that the latter may consider and submit the dossier to the competent person for decision to adjust part of or withdraw all the granted privileges.

In cases where an additional IP certificate is granted, the old one shall be withdrawn.

In cases where all the granted privileges are withdrawn, the decision on the withdrawal of IP certificates shall be sent to the agencies involved in the implementation of the privilege contents.

4. For case of a request for the exemption of import tax on equipment, machinery and/or specialized transport means:

a/ The equipment, machinery and/or specialized transport means to be exempt from import tax must conform with the investment objectives and technical plans as well as the technologies written in the investment project or the investment decision (if any).

b/ The dossier-processing agency shall base itself on the IP registration application, the investment project and the investment decision (if any), make comparison with the list of machinery, equipment and/or specialized transport means which can be manufactured in the country (issued together with Decision No. 214/1999/QD-BKH of April 26, 1999 of the Ministry of Planning and Investment) in order to determine which machinery, equipment and/or specialized transport means are not yet manufactured in the country, and submit them to the person competent to grant IPs for decision.

If the investor imports a complete equipment and machinery line which includes equipment and machinery that have not yet been manufactured in the country and those that can be manufactured domestically, the import tax shall be exempt for such whole line of equipment and machinery.

In addition to the above-said case, the dossier-processing agency shall also consider the project�s objectives and the market requirements on the products� quality so as to determine which equipment, machinery and/or specialized transport means are already manufactured in the country but fail to satisfy the project�s quality requirements. If deeming it necessary, it may collect the written opinions from the specialized management agencies of the same level before submitting the dossier to the competent person for decision.

c/ The list of machinery, equipment and/or specialized transport means entitled to the import tax exemption shall be written in the IP certificate or additional IP certificate; if such list is too long, it shall be made as an appendix thereof.

d/ Where the IP certificate already granted to an investor�s project includes the import tax exemption contents but the list of goods exempt from import tax has not yet been decided by the Ministry of Trade, such investor shall send an official dispatch requesting the import tax exemption together with the import contract to the agency that has granted such IP certificate. The official dispatch must clearly state the names, specifications, signs and codes as well as the quantity of each type of machinery, equipment and/or specialized transport means to be exempt from import tax. The IP registration dossier- receiving agency shall make comparison with the above said conditions so as to send a written notice to the investor and the border customs office where the import procedures are filled in so that the latter may know and implement it.

IV. TIME-LIMIT FOR CONSIDERING THE GRANTING OF IP

An IP certificate or an additional IP certificate shall be granted within 20 working days, after the dossier-receiving agency receives a complete and valid dossier.

A valid dossier is the one that contains all the valid elements defined in Section II of this Circular.

Where a dossier is invalid, the dossier-receiving agency shall, within 3 working days after receiving it, have to notify the investor thereof so that the latter may supplement and complete the dossier.

The date of receiving a dossier is the date when the dossier-receiving agency directly receives the dossier or the date of receipt under the postmark of the post office which has received the dossier if it is sent by mail.

The reduction or withdrawal of all investment privileges shall be effected within 5 working days after the investor�s notice of his/her failure to meet all conditions for privileges is received.

In case of refusal to grant the IP certificate, the dossier-receiving agency shall have to notify in writing the investor of the reasons therefor.

The State management agencies, when consulted on IPs, shall have to give their written replies within 7 working days after receiving a written request therefor; past this time-limit, if no written reply is given, this shall be considered their consent.

V. IMPLEMENTATION PROVISIONS

1. This Circular takes effect after its issuance and replaces Circular No. 02/1998/TT-BKH of March 16, 1998 of the Ministry of Planning and Investment guiding the order and procedures for the granting of IP certificates under the Government�s Decree No. 07/1998/ND-CP of January 15, 1998 detailing the implementation of the Law on Domestic Investment Promotion, and Document No. 955-BKH/DN of February 10, 1999 of the Ministry of Planning and Investment providing provisional guidance pending the application of Domestic Investment Promotion Law (amended) No. 03/1998/QH10.

2. Once every 6 months (on June 10 and December 10), the IP dossier-processing sections of the district People�s Committees shall make reports on the IP-granting situation, the investment support and privilege implementation in their localities as well as the arising problems to be settled to the provincial/municipal Planning and Investment Departments so that the latter make sum-up reports and send them to the provincial People�s Committees and the Ministry of Planning and Investment.

Once every 6 months (on June 20 and December 20), the provincial/municipal Planning and Investment Departments shall sum up the IP granting situation, the investment support and privilege implementation in their localities as well as the arising problems to be settled, then send them to the Ministry of Planning and Investment for summing up and reporting to the Government.

In the course of implementation, if any problems arise, the agencies, production and/or business establishments are requested to report them to the Ministry of Planning and Investment for appropriate study, amendment and supplement of the already guided contents.

Minister of Planning and Investment

TRAN XUAN GIA